Friday, May 13, 2016

Targhay

Yesterday I posted It's official - Target boycott fails. As an aside, yours truly made sure that the right executives at Target
know that American Family Association, the choreographer of the boycott, is a certified anti-LGBT hate group. Whether or not that affected their decision to stand firm is unknown.

I looked through some of the comments and I suspect – I do not know for sure – that there is a certain naivety about how our equity markets work. Some people seem to believe that a loss in share value is, in effect, an operating loss for the company.

Moreover, executives (the folks making decisions) own hundreds of thousands of shares of Target including RSUs and options. They have a vested interest in Target's prosperity. Ultimately Target shares will be valued as a multiple of earnings per share and anticipated earnings per share. These folks know that history is on their side. AFA boycotts (mostly over LGBT issues) include (but are not limited to):

7-Eleven

Abercrombie & Fitch

American Airlines

American Girl

Blockbuster Video

Burger King

Calvin Klein

Carl's Jr.

Chobani

Clorox

Comcast

Crest

Ford

Hallmark Cards

Hardee's

Home Depot

Kmart

Kraft Foods

S. C. Johnson & Son

Movie Gallery

Microsoft

MTV

Paramount Pictures

Time Warner

Universal Studios

DreamWorks

Mary Kay

NutriSystem

Old Navy

IKEA

Sears

Pampers

Procter & Gamble

Target

Walt Disney Company

PepsiCo

Walden Books

They might have succeeded in influencing Abercrombie & Fitch but, on the whole, none of these efforts were successful.

National Organization for Marriage jumped on the Target bandwagon. They have been responsible for boycotting Starbucks and General Mills. Those were laughably miserable failures as well. Target may, in the future clarify its policy but they don't seem to have any desire to accede to the demands of AFA. Why should they?